NBN trials cheaper all-fibre option

The company building the national broadband network has quietly trialled a new, low-cost fibre-to-the-premises technology that could achieve the speed and reliability of an all-fibre system to the home, as originally intended by Labor, but at a reduced construction price.

RBA staying cool as the heat rises

Explainer: what will the NBN do for me?

The NBN says it will deliver fast broadband to every home and business in Australia, but when will we get it, what's the 'technology mix', how fast will it be â and how much will it all cost?

But despite the promising results, NBN Co has so far declined to release them, as the government defends its preferred model, which relies principally on copper phone connections for the final link from the neighbourhood cabinet - or node - to the premises.

The revelation has been described by Labor as an "extraordinary leak", which shows the government is deliberately overstating the costs of the full-fibre option, when it knows it can be done cheaper.

Despite the promising results of the fibre trial, NBN Co has so far declined to release them. Photo: Rob Homer

A leaked internal NBN Co document - the second this week - reveals the company has successfully trialled a new "type-3" system or "MT-LFN" or multi-technology local fibre network, which uses cutting-edge, thinner optical fibres combined with flexible joints and other improvements.

The technology advance, which allows the system to bypass the ageing Telstra copper wire network from the node to the home, was tested in two Victorian sites: Ballarat (July 7, 2014 to December 1, 2015) and the south-east Melbourne suburban site of Karingal (July 14, 2014 to December 1 2015).

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The results of that double trial are set out in the commericial-in-confidence document, "CTO Briefing: Multi Technology - Local Fibre Network (MT-LFN)".

Its apparent success suggests that, at the same time as some construction costs of the federal government's cut-price fibre-to-the-node (FTTN) model have increased, according to a separate internal NBN Co assessment revealed exclusively by Fairfax Media on Monday, the costs of the alternative fibre-to-the-premises (FTTP) option preferred by the previous Labor government, may be coming down.

Although the company expects that FTTN will always be cheaper and faster to roll out as well.

A well placed source in the company said that a reduction in cost-per-connection, as a result of improved technology, had always been expected as the giant project proceeded.

However, the trial suggests the savings could be significant, with a fall in the construction cost per-premises of the new approach from the current price of just over $1200 to around half that at just above $600.0

According to a source, the major savings derive from the vastly reduced "civil" construction works needed to provide the service.

These include no longer using "fibre distribution hubs" the above-ground cabinets servicing 200 to 300 homes each that convert the optical fibre signal from the network for its final connection on the copper phone lines - and radically lowered construction costs at the precinct level.

Under the section of the document marked "Opportunity: High cost of fibre in the local network" the dot-point document lists the problem of the current optical fibre connection as a function of the civil cost and time of current local fibre network comprised of pit and duct upgrading, the need for fibre distribution hubs, as well as issues of siting, installation, and reinstatement.

The opposition's shadow communications minister, Jason Clare, said the trials "showed that Malcolm Turnbull has been lying for months about how much it costs to connect to Labor's superior fibre NBN"

"It proves the only reason that Malcolm Turnbull is not connecting millions more Australians to the real NBN is politics," he said.

But the government rejected that outright. Minister for Communications Mitch Fifield said: "It's outrageous for Labor to suggest the NBN has been misrepresenting the cost of fibre to the premises.

"Any claims this is a secret plan are nonsense. NBN actually announced that it has been trialling a possible solution using fibre to the pit in the footpath at its half-year results presentation earlier this month. The Government has given NBN a mandate to find the fastest and most cost-effective way to complete the network."

A spokesman for NBN Co said time was also an important factor. "The primary objective of the NBN is to finish the build and connect 8 million homes to fast broadband by 2020," he said.

"FTTN is proven to be able to be scaled far faster than any other technology, this was already the case globally where other markets have proven it can see entire suburbs turned on in a month.

"It's a matter of public record that FTTP is part of our technology mix and is the most expensive and the hardest to build, so naturally we would always look at ways to reduce cost and time.

"The fact remains FTTP costs $4419 per premises to build, as reported at our half-year results on 5 February, and is far slower to roll out than FTTN (which costs $2300 per premises to build)."